Oil futures top $US90; yen hits two-year low

Oil futures neared $US91 a barrel in Boxing Day trading as investors eyed a potential supply disruption out of Iraq and President Barack Obama said he would return early to Washington DC to try to work out a deal on the budget with Congress.

Crude for February delivery settled $US2.03, or 2.3%, higher at $US90.64 a barrel as trading resumed after Christmas Day.

Oil was rising in part on concerns of reduced oil flow out of the Kurdish areas of Iraq into Turkey over a pay dispute, a trader said.

Oil was also getting a lift on hopes of a last-minute deal over the “fiscal cliff.” The White House and congressional Republicans failed to reach a deal ahead of the Christmas break, sending the sharemarket down..

President Obama, who is on holiday in Hawaii, is due to reach Washington DC early on December 27 to take part in talks aiming at avoiding far-reaching austerity measures due to kick in at the beginning of 2013.

Both chambers of Congress are also due to return to work on Thursday.

Gold futures rise
Gold futures for February delivery settled 0.1% or $UA1.20 higher at $US1660.70 an ounce in Boxing Day trading in New York.

Gold prices, up 6.3% this year, are headed for a 12th straight annual gain as governments and central banks in Japan, Europe and the US boosted measures to shore up growth.

Currencies: Yen hits two-year low
The Japanese yen hit its lowest level against the US dollar in more than two years in Boxing Day trading.

The yen has weakened steadily against the dollar since October on campaign promises by Shinzo Abe, now prime minister, to end Japan's recession, chronic deflation and yen strength by forcing the central bank to take much more aggressive easing measures.

The new finance minister, Tar Aso, is compiling an emergency stimulus package and was known for aggressive spending during his previous tenure, which covered the 2008-09 global financial crisis.

In 2009, Mr. Aso's administration rolled out a ¥14 trillion emergency economic package, the largest on record.

The US dollar hit ¥85.73, its highest level since September 2010, and up from ¥84.81 on Christmas Day. Since October 1, the yen has fallen about 11% against the dollar.

In other trading, the euro rose to $US1.3226, from $US1.3183 late on Christmas Day, while the UK pound bought $US1.6118 compared with $US1.6133.